Tech CEO assesses strategy, Phila. area

Posted: December 3, 2007

After living in Southern California for six years, Philadelphia native Jim Sheward had had enough. He jumped at the chance to move back to the Philadelphia region when he and partner Paul H. Russell decided to start the software and computer-services company Fiberlink Communications Corp., a provider of software and services that allow companies to protect data on laptops from hackers while employees are working away from their offices.

That was 1994. Since then, the Blue Bell company has attracted some big-name investors, such as Goldman Sachs Group Inc. and General Electric Co., and now employs about 230 people. Its customers include Continental Airlines Inc. and the accounting firm Grant Thornton L.L.P.

In an interview, Sheward, 48, who is the company's chief executive officer and a resident of Villanova, discussed his company's strategy and the obstacles faced by tech entrepreneurs in the region.

Q: Why did you decide to locate your business in the Philadelphia area?

A: I was living in California at the time. Paul Russell was living in Bucks County and working in Philadelphia. We started bicoastally, [but the Philadelphia area] was a place where I felt comfortable and where my partner was already living.

Q: What was the main difference between our region and California?

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A: People on the West Coast just dream bigger, and they therefore have bigger expectations, which aren't realistic. . . . My wife is from California, and I think it is a great place. It's culturally very different.

Q: What market need was Fiberlink trying to fill?

A: In the past, we did a great job designing and delivering network access and monitoring basic security. Over the past few years, that has morphed into solutions for our customers' challenges around securing remote workers, who don't receive the updates they need, and protecting data that resides on laptops.

Q: How does that differ from what the big security companies offer?

A: Some security companies have built point solutions that increase complexity. Unfortunately, end users are creative enough to turn these applications off. A lot of the Web sites you can go to today have hidden malware in them, and today's hackers exploit that malware to do harm to your laptop, and potentially your company's network.

Q: How is business going?

A: We'll be profitable for the fourth year in a row. Our software revenue will grow 30 percent over last year.

Q: Any plans to tap the capital markets?

A: I think we certainly have investors who at some point anticipate a liquidity event. We're keeping our options open. We're probably not able to talk more about it at this point.

Q: Is there anything that the Philadelphia region can do to attract more tech entrepreneurs?

A: We have got to figure out what role taxes pay in enticing business and enabling those workers to stay here rather than find jobs elsewhere.

Q: What about the city wage tax?

A: The wage tax is probably one of the more significant challenges. It's forcing companies like ours to circle the perimeter of Philadelphia. In many ways, the younger folks [who want tech jobs] would rather stay in the city.

Q: You mentioned that your late father, Joseph, was your role model in business. Can you elaborate?

A: He believed very much that the customer was right. He believed that you could go a long way by setting the expectations at a level where you could overachieve them. He believed that it was important to tell people what you could do and what you couldn't do. These ideas are all part of our culture, which has served us well.